Correlation Between Covivio SA and Nexity
Can any of the company-specific risk be diversified away by investing in both Covivio SA and Nexity at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Covivio SA and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio SA and Nexity, you can compare the effects of market volatilities on Covivio SA and Nexity and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Covivio SA with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio SA and Nexity.
Diversification Opportunities for Covivio SA and Nexity
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Covivio and Nexity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Covivio SA and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Covivio SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Covivio SA are associated (or correlated) with Nexity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexity has no effect on the direction of Covivio SA i.e., Covivio SA and Nexity go up and down completely randomly.
Pair Corralation between Covivio SA and Nexity
Assuming the 90 days trading horizon Covivio SA is expected to generate 0.54 times more return on investment than Nexity. However, Covivio SA is 1.87 times less risky than Nexity. It trades about 0.02 of its potential returns per unit of risk. Nexity is currently generating about -0.11 per unit of risk. If you would invest 4,906 in Covivio SA on October 26, 2024 and sell it today you would earn a total of 12.00 from holding Covivio SA or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio SA vs. Nexity
Performance |
| Timeline |
| Covivio SA |
| Nexity |
Covivio SA and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio SA and Nexity
The main advantage of trading using opposite Covivio SA and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio SA position performs unexpectedly, Nexity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nexity will offset losses from the drop in Nexity's long position.| Covivio SA vs. Gecina SA | Covivio SA vs. Icade SA | Covivio SA vs. Klepierre SA | Covivio SA vs. Mercialys SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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